1. Project background: catching up on governance ahead of listing
The company is a technology manufacturer in East China that develops and produces high-end equipment, with large state-owned enterprises and listed companies as its main downstream customers. It has been in business for nearly twenty years and generates annual revenue of around RMB 1.5 billion, with profit margins at the upper-middle level for its sector. In 2023 the company formally began preparing for an IPO, planning to list on ChiNext at the Shenzhen Stock Exchange.
Once the listing process began, the first gap to emerge was in governance and the finance function.
On finance, the head of finance was a long-serving employee who had grown up with the founder, starting in accounting and rising to finance director. She knew the company inside out and handled bookkeeping, tax filing and treasury without difficulty. But against IPO requirements, including a formal financial reporting system, internal control, tax planning and investor relations, her experience was clearly short. Once the securities firm and the accounting firm came in, they produced a long list of corrective recommendations. The finance team was overwhelmed and the timetable slipped again and again.
Governance was the more visible problem. The board consisted essentially of the founder and a few core executives, with no Independent Directors and no dedicated audit, remuneration or nomination committees. That structure is common in unlisted companies, but to list the company had to build formal governance to regulatory standards. A CFO, a Board Secretary and Independent Directors were all required.
Hiring had not been ignored. Through friends, the founder met several finance professionals with listing experience, but none of the conversations concluded. Some expected pay far above the company's range. Others, on closer discussion, did have listing experience but only in one part of the process at large companies, with no experience of driving the whole system from zero to one.
Independent Director candidates were even harder to find. Regulators require Independent Directors to have both the right professional capability and independence, yet the company could reach only a limited pool. Some were friends' recommendations, with independence in doubt; others came from the internet, with backgrounds that could not be verified.
2. Defining the need: from finding people to building a governance system
When the YUNLUE team came in, we did not rush to search CVs. We first helped the client establish which key roles a pre-IPO company actually needs, and what the core requirements of each role are.
This is the JTIF methodology applied to an IPO setting: define the problem before looking for answers. We held in-depth conversations with the founder, the incumbent head of finance and the sponsor representative from the securities firm, and agreed the path for three core roles.
CFO (Chief Financial Officer): the highest priority. The core duties are not day-to-day bookkeeping and tax filing, which the existing team can handle, but four areas. First, drive financial regularisation and work with the intermediary institutions to complete the finance workstream of the listing. Second, build the internal control and budgeting systems. Third, own investor relations and engagement with the capital markets. Fourth, plan capital activity after listing.
The corresponding Talent Portrait keywords were: full IPO experience, ideally from shareholding reform through to issuance; a manufacturing background; the ability to lead a team; and an age and seniority level that fit the company.
Board Secretary: the role centres on corporate governance, information disclosure and capital-markets communication. Given the company's situation, we recommended a two-step approach. Appoint the CFO first and let them cover part of the Board Secretary role temporarily, then appoint a dedicated Board Secretary before the listing application. This controls cost and gives the team time to settle.
Independent Directors: at least three are needed, one of whom must be an accounting professional. Their role is not to make up the numbers but to take a real part in governance and provide independent judgement on audit, remuneration and strategy. We recommended prioritising three types of candidate: professionals with accounting firm partner backgrounds, technical experts of influence in the sector, and professionals with listed-company governance experience.
Once the need was clear, the search had a definite direction. It was far more efficient than a vague instruction to find a CFO.
3. Search and assessment: what capital-markets roles require
Roles linked to the capital markets are assessed differently from business or technical roles. Business roles are judged on results and technical roles on output; finance and governance roles are judged on whether the claimed experience is real and whether the capability matches.
We began with the CFO search. The Talent Mapping covered finance heads with IPO experience in the Yangtze River Delta, including finance heads at listed companies in the same sector, finance heads at companies preparing to list, and senior managers and partners at accounting firms who had worked on manufacturing IPOs.
The evidence-chain method played an important role here. Capital-markets candidates often look uniformly strong on paper: they have been through an IPO, have listed-company experience and know accounting standards. On closer inspection the differences are large. Some led the whole process; others were involved in one section. Some experienced a smooth listing; others were part of one that failed. Some worked in a well-regulated environment following procedure; others solved practical problems in difficult conditions.
For example, one candidate's CV said he led a ChiNext listing. It sounded compelling. Background checks showed that he had joined six months before the listing and mainly handled audit liaison rather than coordinating the whole IPO. His leadership was within the finance function, not across the programme. Our client needed someone who could drive the process from the start of shareholding reform right through.
Another candidate had moved from a partner role at an accounting firm. His professional capability was strong and he had worked on many IPOs. Our assessment found that his limitation was an adviser's mindset: he was used to making recommendations and producing plans, but had limited experience of driving change inside a company and leading a team in a hard campaign. A pre-IPO CFO must not only be right, but be able to deliver.
The CFO we ultimately recommended was the finance director of a listed manufacturing company. He had a complete IPO record, involved from shareholding reform through to issuance, and had then spent three years at the listed company, handling annual report disclosure, private placements and investor relations. In his early forties and on an upward trajectory, he was looking for a platform where he could take things from zero to one and then to many.
The Independent Director search follows different logic. The role is not full-time, but it demands professionalism, independence and public credibility. Using industry networks and professional institutions, we screened a group of suitable candidates and focused on three things: solid professional credentials; sufficient time and attention for the role; and no conflict of interest with the company.
4. Appointment and lessons: talent decisions must serve long-term regularisation
Once the CFO started, YUNLUE's work did not end. Under our standard process, 90-day integration tracking is part of the service. For key roles at a pre-IPO company in particular, the quality of integration in the first three months directly affects the listing timetable.
The first thing the new CFO did was not to push corrective actions immediately. He spent a month reviewing the state of the finance team and the requirements of the intermediary institutions, and produced a timetable for financial regularisation. It broke the recommendations from the securities firm and accounting firm into specific tasks, owners and deadlines, and progress was tracked weekly.
The founder was very pleased with this. Previously the finance team had been driven by the intermediaries and spent its days firefighting; now it was setting its own pace, finding and solving problems proactively.
Three months later, at the end of the 90-day integration period, financial regularisation had caught up with the securities firm's overall timetable. The CFO had also settled in with the team: the longer-serving employees had moved from a degree of resistance to learning alongside him.
By the sixth month, around the 180-day mark, the governance structure had also made clear progress. Two Independent Directors were in place, one of them an accounting professional; the board's audit committee and remuneration committee had begun operating; and the framework of the internal control system was largely established. A Board Secretary was being identified, with appointment planned before the filing.
The process was not without difficulties. Once the Independent Directors were in place, they disagreed with management on some questions. That is entirely normal: the value of an Independent Director lies in independent judgement. The founder initially took time to adjust, wondering why the people he had brought in were arguing against him. He came to understand that regularised governance works like this, that not every decision can be made by one person. Having a different voice is a good thing.
Reviewing the project, several points stand out.
First, talent decisions at a pre-IPO company cannot focus only on whether someone can help us list. They must also ask whether we can keep going together after listing. Many companies look for a CFO who specialises in IPO work, arriving before the listing and leaving afterwards. That model looks efficient in the short term but is costly over time, because listing is a starting point, not an endpoint. A genuinely good CFO can stay with the company from pre-IPO into the listed years and help it move from one stage to the next.
Second, building a governance structure is more than assembling the required number of people. Independent Directors and the board's specialist committees are the hardware of governance. The real governance culture, respecting rules, making decisions collectively and being transparent with information, is the software. Hardware can be bought; software takes time to develop.
Third, the two-way match in the JTIF methodology applies equally to capital-markets roles. The best candidate is not the most impressive one but the best-fitting one. A CFO from a large group may have a strong record yet struggle with the do-it-yourself pace of a mid-sized pre-IPO company. An accounting firm professional may have excellent technical skills but lack the broader view of running a business.
Fourth, the evidence-chain approach matters especially in capital-markets roles, where information asymmetry is greater. When a candidate says they led an IPO, how far did that leadership go? When they say they know internal control, did they design it or run it? These questions need multi-angle background checks and cross-verification. YUNLUE interviews six candidates for every hire it makes, and the ratio is even higher for roles of this kind, because the margin for error is smaller and the cost of a wrong hire is greater.
Building a pre-IPO talent team is, at its core, a regularisation upgrade of the organisation. What is added is not simply a few roles but a whole set of governance capabilities and management systems suited to a public company. The work cannot be rushed, but it cannot wait either: planning a step earlier makes the road to listing steadier.